U.S. sanctions won’t bite our billionaires

RUSSIA

Nikolai Makeev

Moskovsky Komsomolets

The Trump administration’s new sanctions on Russian oligarchs will hurt ordinary Russians far more than they will the elite, said Nikolai Makeev. The restrictions, announced last week as a response to what the U.S. claims is Russian cybermeddling in Western democracies, target seven oligarchs and their companies as well as 17 Russian officials. The tycoons’ U.S. assets are now frozen. Americans can’t do any business with them, and international financial institutions that use dollars will shun them. The markets’ reaction was swift: Stock prices of the affected companies crashed. But the billionaires will likely be fine. Most are close to President Vladimir Putin, and the Kremlin has “promised to support any businessmen caught in an unpleasant situation.” Indeed, the Kremlin has no choice, because the state is a major shareholder in most of the sanctioned firms. Instead, the repercussions will hit the rest of us. The ruble has already suffered its biggest daily fall relative to the dollar in more three years, and if the slide continues, inflation will skyrocket. But Russia will fight back. If it can’t use U.S. dollars, it will turn to China and use the yuan. President Trump has made the mistake of picking fights with Russia and China at the same time. As economist Natalia Milchakova says, “Washington will rue the consequences of this rash policy.”